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Alcatel, Telefonica Sign 4G LTE Deal

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Alcatel-Lucent, S.A and Telefonica Brasil, S.A. (VIV - Free Report) recently entered into a 4G LTE infrastructure contract. Alcatel Lucent will the reference supplier of 4G LTE network for Telefonica’s network in Spain. The financial terms of the contract were not disclosed.  

This agreement was signed after two successful pre-commercial 4G LTE pilot networks installations in Madrid and Barcelona. In addition, Telefonica’s confidence on Alcatel Lucent increased after the display of Alcatel-Lucent's 4G LTE capabilities over a live network at the Telefonica in Barcelona at Mobile World Congress 2012 event.

The deployment of 4G LTE networks is expected to increase the speed of services like mobile video download by almost 10 times. In addition, the network will also increase the upload speeds by about 10 megabits-per-second and low latency connections of 50 milliseconds, which are very important for video sharing and online gaming.

Alcatel-Lucent is expected to install about 8,000 4G LTE base stations and the 5620 Service Aware Manager (5620 SAM). This apart, Alcatel-Lucent will also provide installation and turnkey project management services during the preliminary phase of the project, along with integration, maintenance and configuration optimization to further reduce time-to-market for Telefonica Spain.

The deal is a win-win situation for both the companies. For Alcatel Lucent, the deal is the largest 4G LTE contracts in Western Europe. At the same time, the 4G LTE network complements Telefonica Spain's existing ultra-broadband fiber network with the capacity to meet subscribers' ever-increasing need for data.  

Alcatel-Lucent has been strategically forming alliance with a number of telecom companies to provide technology backup services for wireless broadband. In Jul 2013, it entered into an agreement with Surfline Communications Ltd. and successfully deployed the first commercial 4G LTE (long-term evolution) network in Ghana. The collaboration of these companies was primarily targeted to provide high-speed mobile broadband services to meet the demand for fast wireless Internet access in West and Central Africa.

In Jun 2013, Alcatel Lucent signed an agreement with Telenor Group to provide high speed Internet services to Telenor’s 2G, 3G and 4G customers across Europe and Asia.

Alcatel-Lucent currently carries a Zacks Rank #3 (Hold). Relatively better players within the Computer and Technology sector worth mentioning include AVG Technologies N.V. and Alliance Fiber Optic Products Inc. . Both carry a Zacks Rank #2 (Buy).  

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